The Duality of Crony Corruption
in Economic Transition: Toward
an Integrated Framework

Abstract

In order to shed light on the issue of crony corruption in the context of economic transition, I focus on the puzzle of China’s unique experience of economic transition characterized by the duality forms and effects of crony corruption underlying local corporatism in a dual-track (i.e., market and political tracks) transition. I argue that the duality of local corporatism derives from the duality of crony corruption. First, the early form of local corporatism as state-business public alliance is embedded in informal crony corruption as positive for the purpose of wealth growth in the initial phase of economic transition with public and private interests aligned as compatible. Second, the later form of local corporatism as official-manager private collusion is embedded in quasi-formal crony corruption as negative for the purpose of wealth transfer in the later phase with public and private interests in conflict as incompatible. The duality of crony corruption in the two phases of economic transition is caused by the interplay between formal and informal factors and between economic and political factors. My contribution is twofold. First, I explain China’s transition in terms of crony corruption underlying local corporatism. Second, I develop an integrated framework of crony corruption concerning its content, process, antecedent and consequence.

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